Trendwest Resorts, a timeshare marketer and subsidiary of Cendant Corp., agreed to pay $795,000 to California as well as refunds to consumers to settle charges of consumer protection violations in its direct marketing campaigns.
Consumer refunds in the case could exceed $2 million, and Trendwest also must pay more than $900,000 in investigative fees to the state, raising the potential value of the settlement to about $4 million, the California attorney general's office said.
The state's complaint charged Trendwest with violating deceptive-marketing laws as well as automated-dialer and no-call-list rules.
Trendwest, which operates 48 timeshare properties in the western United States, Mexico, Hawaii, British Columbia and the South Pacific, offered consumers gifts and incentives to encourage them to participate in sales seminars. Trendwest offered timeshare use credits of $14,000 to $25,000 along with a one-year trial product for $595.
The state charged Trendwest with misrepresenting its products, violating cancellation notice requirements and illegally failing to honor cancellation requests, along with the telemarketing violations. Trendwest also sold products not covered by its permits and violated prize and incentive laws, the attorney general's office said.
The settlement requires Trendwest to fully disclose annual dues accompanying its timeshares and the limitations of its products in its marketing. Trendwest also must fully disclose cancellation rights and use travel certificates as incentives only if consumers can call a telephone number to select dates when using the certificates to book a trip.
A final provision of the settlement requires that, when holding sales presentations, Trendwest must provide consumers with promised incentive products at the end of time period it originally told consumers would be the length of the presentation.
Cendant is a travel and real estate company.